All Topics / Finance / IP LOC

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  • Profile photo of wayne10539wayne10539
    Member
    @wayne10539
    Join Date: 2003
    Post Count: 73
    February 22, 2007 - 3:13 am

    Hi Guys

    Just a few queries regarding using a LOC against IP equity. What is the amount lenders will lend aginst your IP equity, is it 80%, and are the interest rates generally higher for this type of loan?

    1/ Is the interest incurred from the LOC loan tax deductible.

    2/ Can the LOC funds be used for the deposit, loan fees, stamp duty, settlement fees, maintenance expenses, insurances and rates.

    Thanks

    Wayne

    “What is the lap record, and which way do i go?”

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 22, 2007 - 3:27 am

    Hi Wayne

    Ok LOC maximum is normally 90% although i know of one lender that will go to 95%. Anything over 80% usually requires LMI which is of course Tax deductible if the funds are for investment / business.

    All interest from the LOC is tax deductible if the funds are to be used for funding deposits for IP purchases on anything that is used to generate a Taxable income.

    Interest rate wil vary but normally you maybe be looking at a 0.01% higher rate than a standard variable loan but given the flexibility and that it is tax deductible it is nothing.

    Make sure you dont X Collaralise those loans though as it is a lenders whim to suggest that course of action. .

    Cheers

    Richard Taylor
    Residential & Commercial Finance Broker.
    Licensed Financial Planner. Ph: 07 3720 1888
    [email protected]
    New 100% Shared Equity scheme coming soon – Email us for details.

    Richard Taylor | Australia's leading private lender

    Profile photo of wayne10539wayne10539
    Member
    @wayne10539
    Join Date: 2003
    Post Count: 73
    February 22, 2007 - 3:40 am

    Thanks Richard

    Do you deal with WA clients? Also i have a current LOC (200k) on my PPOR, do lenders see this as a debt, even if there is no draw down on the LOC, am i better off closing this LOC loan?

    Wayne

    “What is the lap record, and which way do i go?”

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 22, 2007 - 3:52 am

    I hold the appropriate WA Credit License to assist WA clients – YES.

    Might even have 1 or two happy ones on the forum here who can give me a wrap.

    Cheers

    Richard Taylor
    Residential & Commercial Finance Broker.
    Licensed Financial Planner. Ph: 07 3720 1888
    [email protected]
    New 100% Shared Equity scheme coming soon – Email us for details.

    Richard Taylor | Australia's leading private lender

Viewing 4 posts - 1 through 4 (of 4 total)

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